Iraqi Kurdish fighters backed by U.S. special forces have entered the oil-rich northern city of Kirkuk.

Correspondents traveling with the Kurdish fighters say Iraqi defenders of the city appear to have fled.

Residents of Kirkuk celebrated by toppling a statute of Saddam Hussein dressed in flowing Arab robes in the town square. There are also reports of some looting.

News of the Kurdish advance has unsettled Turkey, which fears a Kurdish state in Iraq might incite a separatist rebellion among its own sizable Kurdish population. Turkey has deployed troops near its border and says it could move into northern Iraq if its interests are threatened.

Turkish Prime Minister Abdullah Gul said Thursday, U.S. Secretary of State Colin Powell reassured him that U.S. forces would remove the Kurdish fighters from Kirkuk and that new U.S. troops would be sent to the oil-rich city. Mr. Gul also said Ankara will send military observers into northern Iraq.

Earlier, Kurdish fighters took over another strategic city, Khaneqin - near the Iranian border, and about 100 kilometers southeast of Kirkuk.

Kurdish fighters are also moving close to the region's largest city, Mosul, northwest of Kirkuk.

U.S. warplanes have been bombing Iraqi military positions in the northern region for the past several days.